Sometimes the more answers we get, the more questions we have. The same may be true when it comes to Medicaid. Someone who needs help paying for medical care or a nursing home may be relieved to learn that Medicaid offers this type of benefits. Then they learn that the application process is difficult. You have to qualify for Medicaid benefits, and some of the requirements are hard to understand. For example, you may want to learn more about the Medicaid income limit. That’s what we will explore in this blog.
First, what are the basic Medicaid qualifications?
Medicaid offers several programs, each with its own qualifications. For example, Medicaid for Pregnant Women and Medicaid in the Nursing Home target very different groups. That said, Medicaid generally is intended for people with low incomes. Applicants who exceed the Medicaid income limit usually will not qualify for benefits.
What is the current Medicaid income limit?
It varies. The income limit for people who qualify through Supplemental Security Income (SSI) is $791 per month / $1,177 for couples.
However, the Medicaid in the Nursing Home program income limit is $2,313 per month for one person. This limit also applies to:
Elderly and Disabled Waiver,
Independent Living Waiver,
Persons with Intellectual Disabilities Waiver, and
Technology-Assisted Waiver for Adults.
Effective February 2019, Medicaid uses the Modified Adjusted Gross Income (MAGI) method of determining income for some programs. For example, the Plan First and Pregnant Women & Children programs calculate income after deductions based on family size:
Family of 1 = $1,520
Family of 2 = $2,058
Family of 3 = $2,596
Family of 4 = $3,133
You may be wondering if Medicaid counts all your income when determining if you are qualified for benefits.
What does Medicaid consider to be income?
Generally, Medicaid counts all the following income toward your Medicaid income limit:
Federal taxable wages;
Self-employment income;
Unemployment compensation;
Social Security benefits, including Social Security Disability Income (SSDI);
Retirement or pension income;
Alimony or spousal support for divorces finalized before January 1, 2019;
Capital gains;
Investment income;
Rental and royalty income; and
Untaxed foreign income.
Income that is not counted toward the limit includes:
Supplemental Security Income (SSI);
Veterans’ disability payments,
Workers’ Compensation,
Proceeds from loans, including student loans; and
Child support.
I’m just over Medicaid income limit. Is there anything I can do?
Possibly. Just talk to an experienced Alabama Medicaid lawyer about Medicaid planning and spend-down strategies.
The attorneys at Miller Estate and Elder Law assist their clients with Medicaid and incapacity planning, as well as general estate planning. Contact Bill Miller at 256-251-2137 to schedule an appointment. Though our office is now located at 818 Leighton Avenue in Anniston, we serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
Also, download a copy of our free e-book, Medicaid Planning in Alabama: What You Need to Know, by clicking here.
Benefit programs like Medicaid often include strict requirements and rules. To qualify for Medicaid, for example, an applicant must show a financial need by staying below Medicaid’s income and resource limits. However, some people need Medicaid benefits but exceed the amounts Medicaid allows. In this article, we will look at those limits, and, more importantly, how to spend-down your assets and monthly income to meet them.
Medicaid Limits on Income and Resources
A nursing home resident typically can possess no more than $2,000 in resources as of the first day of the month.
However, Medicaid does not count all of your assets and income. Some resources might be considered as countable, including cash, real estate, and one automobile per household. The status of some assets may change in certain situations. For example, real estate held as a life estate or that is on the market may not be counted.
It’s to your benefit to consult with an experienced attorney before applying for Medicaid or attempting any sort of spend-down activities.
Planning a Spend-Down
After learning you may not qualify for Medicaid because of income and asset limits, you may want to plan a spend-down of your assets. But how exactly do you go about doing this? Here are some important considerations:
Where are you living?
Are you married or single?
What is the source of your income?
What type of assets do you have?
The answers to these questions may make a difference in how you spend proceed. Make sure your lawyer has all the information needed to advise you about spending down your assets.
Actions That Spend-Down Your Assets and Monthly Income
After carefully assessing your resources compared to Medicaid’s requirements, you may start taking some of the following steps:
Pay your medical bills. Certain medical bills can be paid to reduce your countable cash assets. In addition to your own, you may be able to pay medical bills for your spouse and your children. You can pay past and current medical expenses, which may include transportation costs, therapists, personal care attendants, home health aides, rehabilitation programs, prescription drugs, and medical equipment ordered by a doctor.
Pay off other debts. You may be eligible to use excess income to reduce mortgage, auto loan, and credit card balances.
Sell certain assets. In some situations, countable assets may be sold to pay off medical bills and debts to reduce a recipient’s resources.
Set up a Miller Trust. Excess monthly income can be diverted to a Miller Trust to stay below Medicaid’s monthly income and resource limits. Funds in the Miller Trust can be used for eligible expenses.
Keep in mind that transferring, selling, or spending assets may result in reductions or delays in benefits.
Spend-Down Your Assets and Monthly Income Wisely
The rules are complicated. Always speak with an experienced attorney before trying any kind of spend-down strategies.
Will Medicaid take my home or will Medicaid take my house are two of the most common questions I get when someone is entering the nursing home and trying to qualify for Medicaid. This is understandable since people’s homes are obviously very important to them. Many times, the home is a persons most valuable asset. They do not want to lose their home if they apply for Medicaid and have to go into a nursing home to pay for their long term care costs.
Medicaid Does Not Actually Take Anything
It is important to understand that Medicaid does not actually take anything from a person who applies for Medicaid. Medicaid will just not pay unless you have spent all of your assets down to a certain amount. Medicaid has asset limits and will not pay if you have more than the limit. A single individual cannot have more than $2,000 in assets; a married person who is not going into the nursing home can keep one half of the total assets up to $128,420. Because of the assets limits, it is not uncommon for people to wonder will medicaid take my home.
Will Medicaid Take Your Home – No, but They Will Put a Lien on It
If you are married and your spouse continues to reside in the home, the home is exempt and you could qualify for Medicaid with no risk to your home. If you are single, on the other hand, you can still qualify for Medicaid, even you have a house, but Medicaid is going to put a lien on the home for any amount of money that they pay on your behalf. Then, when you pass away, Medicaid is entitled to be reimbursed for any amount of money they have paid for your care. The problem is that often the Medicaid lien will exceed the value of your home when you pass away. If so, then your family would not get any money from your home. There are ways to protect your home, but it takes advanced planning. If you have asked yourself “Will Medicaid Take my Home” you are not alone. This is a common concern for someone entering the nursing home.
We have helped many families protect their homes and other assets. Let us help you – call us today at 256 251-2137.
Do I Have to Wait 60 Months to Qualify for Medicaid?
One of the most frequent questions that I get as an elder law attorney when someone’s trying to apply for Medicaid to get in a nursing home, is, “Do I have to wait 60 months to Qualify for Medicaid?” And the answer is, “No.”
The Medicaid Look Back Period is Different from the Medicaid Penalty Period
60 months is simply the look-back period, or the amount of time that Medicaid looks back to see if you’ve given any assets away or if you have sold assets for less than fair market value. So, when you file the application, you have to meet the financial requirements which I’ll address in another video. But once you meet those financial requirements then Medicaid is also going to look back 60 months to see if you’ve given away any assets during that time.
If you have given away assets during the past 60 months, then they’re going to penalize you based on the amount of money that was given away. The penalty period is determined by the amount of money you gave away divided by a divisor that is put out by Medicaid. The Medicaid look back period of 60 months is the same for everyone. The penalty period is different for everyone. However, there is no Medicaid 60 month rule that says you have to wait 60 months to apply for Medicaid. Most of our clients don not wait 60 months. We even have clients who are already in a nursing home and we can help them protect some of their assets.
if you have any other questions, watch the other videos or give us a call 256 472-2172. I look forward to meeting you.
Hearing a doctor say that your loved one needs skilled nursing care, 24/7, can be a real shock. Chances are, you have not given much thought to planning for long-term care. If you have just learned that your dad or mom needs 24/7 care – or think this may happen in the future – continue reading to learn more about what you can do to help.
The Realities of 24/7 Care
If your mom needs 24/7 care, you are not alone. In fact, the following statistics tell an interesting story about long-term care:
52% of people age 65 right now will need long-term care at some point.
47% of men and 58% of women age 65 or older face long-term care.
Some people will need skilled nursing care for years. The cost of 24/7 care can be staggering. In Alabama, the monthly costs for long-term care in 2018 were:
$3,241 for homemaker services or a home health aide
$3,271 for an assisted living facility
$6,279 for a semi-private room in a nursing facility
$6,661 for a private room in a nursing facility
What can you do to help someone who needs 24/7 care?
Applying for Medicaid
Once you find a good nursing home, you need to figure out how to pay for it. This can be tricky. There are basically three ways to pay for long-term care: self-pay, long-term care insurance, and Medicaid.
You may need the Medicaid money now but don’t know how to get it or even if you will be eligible.
Medicaid offers a number of programs to provide medical care for people with limited assets and resources. To qualify, the application will need to meet certain asset and resource tests. For example, someone who needs 24/7 care must not earn more than $2,250 per month or have more than $2,000 in resources.
Applying for Medicaid can be frustrating and time consuming, in part because of the amount of supporting documentation. In addition, Medicaid case workers will review the applicant’s finances for a 60-month period prior to the application date. Certain transactions made during that time may disqualify the applicant from or delay benefits.
Medicaid Is Complicated. We Can Help.
It’s possible – and highly recommended – to plan ahead for incapacity and long-term care. Estate
planning can help, especially if Medicaid planning is included.
For a free consultation with an experienced Alabama estate planning attorney, contact Bill Miller
at 256-472-1900. Miller Estate and Elder Law is now located at 818 Leighton Avenue in
Anniston, but we serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding
areas.
There is never a “right” time to enter a skilled nursing home. For most of us, we wish to live our lives in the comfort of our own homes and never have to contemplate a time when we would leave them because we need long-term care. Unfortunately, as we age, our needs, especially when it comes to our health, may not match what we want.
There may come a time when you or a loved one will need care outside the home. This could be due to a health care crisis, a cognitive decline, or for many other reasons. The question then changes to a more immediate issue: how will you be able to afford this care for your spouse in addition to your monthly bills?
Medicaid has a fixed amount of countable assets you are allowed to own and also receive Medicaid assistance.
What happens, then, should you have more than this amount? Did you know that in our state a Medicaid “spend down” of countable assets can be done to make sure the spouse entering into the skilled nursing facility is immediately eligible for Medicaid nursing home assistance? This is done because the spouse in a nursing home, often referred to as the “institutionalized spouse”, cannot own more than $2,000 in countable assets and the healthy or “community” spouse can only own countable assets that do not exceed $126,420.
A “spend down” scenario exists when the community spouse purchases assets that result in there being less cash or available assets that would otherwise disqualify the institutionalized spouse from Medicaid nursing home assistance. The “spend down” is accomplished by the community spouse paying for things that are allowed. For example, he or she could pay cash to improve his or her residence, pay off a credit card balance, or purchase a new automobile. There is no limitation on the ways in which a spend down can be accomplished. However, the spend down cannot result in a gift being made. This would constitute a penalty that would make the nursing home spouse ineligible for assistance.
The risk of a spend down is that the nursing home spouse may suddenly die. In such an event, the cash that could have available for the community spouse’s needs over the ensuing years of comfort may no longer be available for the community spouse’s medical or other emergency needs. There are alternatives to spending down. Rather than spending down the assets and subsequently not having the cash for emergencies, the community spouse should consider using the proceeds received through an allowed Medicaid strategy. For example, he or she could utilize a reverse mortgage on the residence to pay the nursing home costs rather than leaving the community spouse without sufficient funds for future expenses.
Another strategy could be creating a non-countable asset such as a Medicaid Qualifying Annuity.
This annuity can be owned by the community spouse, regardless of its value. This annuity must meet strict rules including being irrevocable, non-assignable, have no cash value, and payable over no more than the owner’s life expectancy. Since the community spouse may also eventually need long-term care, the community spouse’s purchasing a Medicaid Qualifying Annuity may be the best solution for protecting assets since the investment in the annuity, if not used for care, could be paid back to the community spouse and then be available for his or her subsequent long-term care.
We know this article may raise more questions than it answers. There is never a wrong time to plan for the potential need for long-term care in a skilled nursing facility and, often, pre-planning can help you achieve the strategies you need early on. Whether you are in a crisis or pre-planning today, know that we have solutions available for you. Do not wait to contact our firm and schedule a meeting to discuss your needs.
